6.  The applicant is the agricultural production co-operative “Dimskiy” (сельскохозяйственный производственный кооператив «Димский»), a legal entity under the Russian law, established in 1992 in the village of Novoaleksandrovka in the Tambov District of the Amur Region. The applicant was subsequently re-organised into a joint-stock company “Dimskoye” (ОАО «Димское»).
7.  In 1987 the General Secretary of the USSR Communist Party Mikhail Gorbachev presented his “basic theses”, which laid the political foundation for economic reform heralding the transition to a market economy. Several laws were enacted which opened up the State-dominated planned economy to private enterprise. However, the Government preferred to keep control over consumer prices rather than leaving them to be determined by the free market.
8.  By 1990 Government spending increased sharply as a growing number of unprofitable enterprises required State support, whereas more resources were diverted to subsidise consumer prices. At the same time, the elimination of central control over production decisions, especially in the consumer-goods sector, led to a breakdown in traditional supply-demand relationships. This resulted in pervasive shortages of food and basic consumer goods. The Government reacted by introducing ration stamps for food and certain hygiene articles.
9.  In addition to ration stamps, the Government of the Russian Socialist Federative Soviet Republic (RSFSR)[1] put into circulation several types of so-called “commodity bonds” (товарные чеки) which gave their bearers the right to purchase consumer goods, such as refrigerators, washing machines, tape recorders and passenger cars. The Urozhay-90 (“Harvest-90”) bonds were one of many types of bonds; they were distributed among agricultural workers and companies which had sold grain and other agricultural produce to the State in 1990 and 1991. Those bonds were designed to encourage agricultural workers to sell produce to the State in exchange for the right to priority purchasing of goods in high demand (see paragraph 26 below). The State paid workers for the produce at fixed prices and also gave them bonds in amounts proportionate to the value of the produce sold.
10.  The Urozhay-90 bonds were not legal tender, but they had a certain nominal value indicated on their face. That value determined the maximum purchase price of consumer goods which could be sold on production of the bonds. The bonds were not intended for payment but merely for certification of the right to purchase specific goods; the sale of goods was conditional on payment of the full purchase price by the bond-holder and production of the bonds for the same amount. The bonds were not registered in the person’s name or otherwise personalised and the Government Resolution did not prevent them from being transferred among individuals and legal entities.
11.  On 2 January 1992 the Russian Government decided to put an end to the regulation of retail prices. Shops began to fill up with merchandise but prices increased at a staggering speed (the inflation rate in 1992 was 2,600%). In March 1992, the Government established that goods available under the bonds would be sold at the prices fixed before 2 January 1992 (see paragraph 27 below).
12.  In August 1992 the Government introduced the possibility of buying out the bonds with a coefficient of 10. In 1994, the coefficient was raised to 70 (see paragraphs 28 and 29 below). It appears that a significant number of bonds were bought out by the State before the buyout operations were stopped in 1996 (see paragraph 31 below).
13.  In 1995 the status of the commodity bonds was codified in the Commodity Bonds Act passed by Parliament (see paragraph 30 below). Its text was very laconic, shorter than one page, but it purported to cover every type of commodities bonds issued in previous years. Section 1 recognised the commodity bonds as part of the internal debt of the Russian Federation; section 2 fixed at ten years the limitation period for the obligations arising out of commodity bonds (the starting date was not specified); section 3 required the Government to adopt a programme for settlement of the internal debt.
14.  In 2000 the Government presented the programme for settlement of the internal debt (see paragraph 33 below). It covered every type of commodity bond, save for the Urozhay-90 bonds. A few months before the Commodity Bonds Act was amended so as to provide that the settlement of the debt under the Urozhay-90 bonds would be regulated by a special federal law (see paragraph 32 below).
15.  Between 2003 and 2009 the application of section 1 of the Commodity Bonds Act was suspended in the part concerning the Urozhay-90 bonds, in accordance with the laws on the federal budget for each successive year (see paragraph 34 below).
16.  In 2009 Parliament passed a law on the buyout of the Urozhay-90 bonds and the Government issued implementing regulations which set out a detailed procedure for buyout of the bonds (see paragraphs 35 and 36 below).
17.  The applicant holds Urozhay-90 bonds with a total nominal value of 343,375 non-denominated Russian roubles (RUR).
18.  On 1 March 2001 the applicant brought an action against the Russian Government, seeking to recover 8,236,498 Russian roubles (RUB) as compensation for the bonds. The amount was calculated as the nominal value of the bonds multiplied by the official inflation co-efficient.
19.  On 7 May 2001 the Commercial Court of the Amur Region issued a decision to dismiss the applicant’s claim. It noted that the federal law establishing the procedure for redemption of Urozhay-90 bonds had not yet been adopted and their maturity date had not been determined. The Commercial Court held that the plaintiff had not yet obtained the right to lodge this claim.
20.  On 20 June 2001 the Appeals Division of the Commercial Court of the Amur Region quashed the decision of 7 May 2001 on procedural grounds and remitted the claim for a new examination.
21.  On 27 August 2001 the Commercial Court of the Amur Region gave judgment. It established that the Ministry of Finance, rather than the Russian Government, should have been the proper defendant in the applicant’s claim for damages because the Russian Government had not committed any unlawful actions. As the applicant refused to substitute the original defendant or to join the Ministry of Finance as a co-defendant and as the court was not competent to do so of its own motion, it determined to disallow the applicant’s claim.
22.  On 22 October 2001 the Appeals Division of the Commercial Court of the Amur Region upheld the judgment of 27 August 2001.
23.  Counsel for the applicant, Mr Okunev, submitted a cassation appeal. On 23 November 2001 the Federal Commercial Court of the Far-Eastern Circuit fixed the hearing date for 11 December 2001. Mr Okunev had been notified of that decision on 3 December 2001 by registered mail.
24.  On 11 December 2001 the Federal Commercial Court heard oral submissions by Mr Okunev and adjourned the hearing until 17 December 2001.
25.  On 17 December 2001 Mr Okunev did not appear at court. In the absence of any valid reason for his absence, the Federal Commercial Court proceeded with the hearing and upheld, in the final instance, the judgments of 27 August and 22 October 2001. It confirmed that the actions of the Russian Government had been lawful and that the Ministry of Finance was responsible for the debts chargeable to the treasury.